Odessa, Inc., reports the following information concerning operations for the mo

Question

Odessa, Inc., reports the following information concerning operations for the most recent month Master Budget based on budgeted 550 units) 593,500 Actual (based on actual of 495 units) Sales revenue Less Manufacturing costs Direct labor Materials Variable overhead Marketing Administrative 12.440 10,200 6.440 4,602 13,200 12,.100 8,250 5,280 Total variable costs Contribution margin 547.808 Fixed costs Manufacturing Marketing Administrative 4.400 8,800 4,255 Total fixed costs Opera 9.182 22.197 25,611 ting profits 528,270 There are no inventories

Explanation / Answer

Odessa Inc Profit Variance Analysis Actual (495 units) Manufacturing Variance Marketing and Administrative Variance Sales Price Variance Flexible Budget (Units) Sales Activity Variance Master Budget(550 units) Sales Revenue 85890    1,740 Favourable 84150 - 9,350 Unfavourable 93500 (495*170) Variable Costs Manufacturing Direct Labor 12440 560 Unfavorable 11880 -1320 Favorable 13200 (13200/550*495) Materials 10200 -690 Favourable 10890 -1210 Favorable 12100 (12100/550*495) Overhead 6440 -985 Favourable 7425 -825 Favorable 8250 (8250/550*495) Marketing 4602 -150 Favourable 4752 -528 Favorable 5280 (5280/550*495) Administrative 4400 440 Unfavourable 3960 -440 Favorable 4400 (4400/550*495) Contribution Margin 47808 -1115 Favourable 290 Unfavourable - 1,740 Favourable 45243 -5027 Unfavourable 50270 Fixed Costs Manufacturing 4255 -145 Favourable 4400 0 4400 Marketing 9182 382 Unfavourable 8800 0 8800 Administrative 8760 -40 Favourable 8800 0 8800 Operating Profit 25611 -1260 Favourable 632 Unfavourable -1740 Favourable 23243 -5027 Unfavourable 28270

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